Makao Frequently Asked Questions

Makao Frequently Asked Questions

1.    Is the 1% inspection fee we will charge the customer before the site visit refundable?

No. The inspection fees are not refundable as they are used to defray costs associated with the initial inspection. The fees are paid upfront before the first site visit to ensure that HF spends its resources on serious takers.

2.    Does the 1% inspection fee cater for site visits that will be done for duration of the construction?

The 1% inspection fees should be able to cater for the rest if the site visits depending on the size of the project.

3.    Is the customer allowed to alter the Makao designs?

One of the challenges experienced in the previous Makao was the alteration of house designs without the prior knowledge of HF. The customers will be allowed to make alterations within limits in consultation with the HF & the Consortium after the site visit. However, after the customer has done the final sign-off and the project has been commissioned, no alterations will be allowed until the project is over. In exceptional cases and on a case-by-case basis the customer will be allowed to alter the designs on condition that all parties are aware, the customer deposits in an account the full amount that will cater for the extra expenses incurred as a result of alterations and that construction stops on site until all conditions resulting from the alterations are met

4.    Are the customers going to know the kind of finishes to expect of their homes?

There are 3 types of finishes found in the catalogue and the customers will be able to select the type of finish they would like.

5.    What happens if we prequalify someone and then after appraisal, we establish that they do not qualify for the amount they have applied for?

The customer will have to advised accordingly and the process will have start again to establish a house type that is within the amount they qualify for.

6.    Will the buy-plot-build be applicable for Makao?

One of the key assumptions for Makao is that the customer already has land with a clean title deed. In a situation where the customer wants a buy-plot-build under Makao, it is advisable that they start by purchasing a plot first and then taking up Makao later.

7.    What terms will be applied to customers under existing scheme?

The existing scheme rules will apply. However, the 1% inspection fees will still be applicable as well as the 1% of the commitment fee which is used during the construction period.

8.    What will be the price range for the various house types?

The current price ranges from Kshs 1.6 million to Kshs 27 million.

9.    Can we allow a customer to come with their own designs and use one of the consortium to implement the project on their behalf?

No. The customer will be advised to take up a construction loan.

Other Questions on Makao

10.  At what point will the current account and Makao savings account be opened?

The accounts will be opened before the site visit to facilitate the depositing of the inspection fees and the regular savings.

11.  Will Makao be done on labour-based or fixed contract?

In the reviewed Makao, HF will deal with the consortia and not the contractor as was the case previously. Therefore whether the project will be done through fixed contract or labour based is up to the consortia to decide.

12.  How are the current account and the Makao savings account related?

The current account will be instrumental in facilitating the customer’s regular transactions. The customer will be required to do regular internal transfers from their current accounts to the Makao savings account.

13.  How does the 100% financing under Makao relate to other products such Ezesha’s 105% or Home Freedom’s 115%?

Depending on the customer’s qualification and ability to pay, the customer can opt for any of the other products such as Ezesha and Home Freedom. This will offer the customer opportunities to cater for any other costs associated with their home such as furnishing the house.

14.  How can we ensure that the customer deposits a minimum of Kes 500 in the Makao account?

The customer can set up a free standing order to their Makao saving account. The Makao savings account will also serve as a motivation for those customers who do not qualify for Makao immediately but are keen on the product in the future.

15.  Will the Makao savings account be used for the drawdowns?

The Makao savings account allows for only quarterly withdrawals and hence it is not ideal for drawdowns.

16.  What if the customer is already a Crossover account holder, will (s)he have to open a Makao account?

No. It will not be necessary for the customer to open a Makao savings account.

17.  Why should a customer open both a Current account and Makao savings account?

The reviewed Makao product has a deposit mobilization objective and therefore it is important that the customer opens both accounts for transactional capabilities and for savings.

18.  Does the customer have to complete two (2) account opening forms to open both the Current and Makao savings accounts?

The same account opening form can be used to open both accounts.

19.  Will the subsequent incremental house designs be done by the same consortium that designed them?

Yes. The consortium that designed the house type will be best placed to execute the incremental house design.

20.  Will the Project Administration team at HF be able to handle the volumes once the product uptake increases?

The capacity in project administration is being enhanced and there are plans to increase their mobility so that they are able to visit several sites in a day.

21.  Can a customer finance part of the construction through cash and part through HF financing?

Yes, this is possible.

22.  What will the terms be like for a customer who opts to secure the facility through cash cover?

The existing cash cover policy applies. Currently, HF puts a margin of 5% above the interest rate we are offering the customer.

23.  Can HF be able to settle the statutory costs on behalf the customer?

It is possible to build in this into a facility especially if the customer has the ability to qualify for Ezesha or Home Freedom which finance more than 100% of the construction cost.

24.  What happens if competition buys out the mortgage facility after HF has completed the building through Makao?

We will strive to maintain the customers within our books through good relationship management and offering competitive interest rates

25.  Will there be a Good Payer’s Discount for Makao?

Yes it will once the construction loan is converted to a long-term loan.

26.  For cash Makao, why can’t we charge a one-off fee of 11% instead of separating the inspection fees (1%) and project administration fees (10%)?

We cannot charge one fee because the fees serve different purposes and have to be paid at different times in the process. The inspection fees is required before the first site visit and once we established the correct house type for the customer and we are ready to implement, the customer will be required to pay the project administration fees.

27.  Are we going to offer mortgage facilities in foreign currency especially for Kenyans in the Diaspora?

This is possible since we offer foreign currency denominated loans. However, it is important to note that the foreign currency conversion rate will be based on the prevailing market rates.

28.  Are we able to state the prices for the house types in the catalogue in foreign currency?

The estimated pricing for the house types is in Kenya shillings since most of the transactions concerning the project will be in Kenya shillings. The pricing can be stated in Kenya shillings but the customer needs to be made aware of currency fluctuations that may affect the final pricing.

29.  How regularly will the house designs be reviewed?

This shall be done annually

30.  Will we charge interest for funds disbursed during the construction period?

Yes.

31.  Will the customer be required to raise other professional fees in Makao?

The price estimates found in the catalogue include the professional fees and this is a good selling proposition in that the customer should not expect to raise any other funds once we settle on the cost of the project.

32.  What happens if the area the customer wants to build the home is controlled development?

This and other details about the site shall be established during the site visit and the customer will be advised accordingly.

33.  Under Makao, will there be restrictions on lending to customer to put up building outside a municipality?

The existing policy will apply.

34.  Can a customer offer an alternative security to secure the construction of a Makao project?

Yes. The customer can be advised to take our equity release product dubbed Vuna hela and use the funds for Makao.

35.  Can Makao cater for stalled projects?

No. The most ideal solution for the customer in this case is our construction loan.

36.  Are the usual insurances going to be applicable for Makao?

Yes they will.

37.  In case a prequalified customer has a encounters a situation where their loan is declined, can we lend for the amount (s)he qualifies for?

Yes we can but the customer will be required to raise the difference and deposit it in the current account.

38.  What happens if the customer is not happy with their Makao home?

The reason for this will need to be established to come up with a reasonable solution. However, we shall strive avoid such situations through proper relationship management 

39.  Can a customer take Makao for residential investment purposes?

Yes. Some of the house types include apartments which are ideal for residential investment.

40.  How will we allocate the various projects among the consortia?

It will be competitive. The consortium whose designs are popular with the customers will stand to gain.

41.  Which fees will be applicable when a customer takes a hybrid of Cash Makao and Makao loan?

The fees for cash Makao are applicable for customers who are funding the entire project by cash. The Makao loan terms and conditions will be applicable for any person who does a combination of both.